YES Bank appoints former Irdai chief Vijayan independent director

Private lender YES Bank appointed T.S Vijayan former Chairman of Insurance Regulatory and Development Authority of India as additional independent director, with immediate effect. Vijayan has previously served as chairman of Life Insurance Corporation of India. 

The appointment of Vijayan as an independent director on the bank’s board for a period of five years is subject to shareholders’ approval at the next general meeting, the bank said in a filing to the exchanges.

The bank’s MD & CEO Rana Kapoor’s three-year reappointment was cut short by an order issued by the Reserve Bank of India (RBI). He will be in office till January 31.

Vijayan has been a key member of the search and selection committee set up to identify a suitable successor for the MD & CEO, said the bank. “Given that the committee has made significant progress and is in advanced stages, the board has decided to seek Vijayan’s larger engagement and involvement, now as an additional board director (independent) with continuation on the four-member committee.”

This appointment comes against the backdrop of the four board-level exits that the bank saw in the past few months, raising questions of corporate governance at the bank.  R Chandrashekhar resigned from the bank due to discontent over the internal processes. Previously the bank’s chairman Ashok Chawla resigned. Former State Bank of India chairman O P Bhatt resigned from YES bank's search committee citing ‘conflict of interest’. Independent director Vasant Gujarathi also stepped down.  

Last week, ratings agencies Moody’s and ICRA downgraded the bank’s instruments, saying the resignation of the bank’s various board members raise concerns over corporate governance.

The bank’s board currently does not have a chairman and the bank said that it would submit names of the new chairman for the approval of the RBI at a board meeting to be held on December 13. The bank will also consider the proposals for appointment of independent directors.

The bank plans to submit its list of candidates for MD & CEO to the RBI by December 15. The two groups, led by co-promoters Rana Kapoor and Madhu Kapur, have been in active discussion since YES Bank’s request for extending Kapoor’s term was rejected. However, there is no clarity on the timeline for peace between the two groups.

The bank’s stock closed at Rs178, down by 4.92 per cent from previous close